The concept of materiality refers to ________.
A) any misstatement in the financial statements
B) the overall degree of risk in an organization
C) an amount of misstatement that could lead someone to make a poor decision and suffer a loss
D) an amount of risk in an organization sufficient to offset the expected returns of any investment in the company

Question

Quizplus · Accepted Answer

Materiality refers to an amount of misstatement that could influence someone's decision-making and potentially cause a loss. It is a key concept in auditing and financial reporting, as material misstatements must be disclosed in financial statements.

The Concept of Materiality Refers to ________